Failure to Prepare an Adjusting Entry at the End of a Period

question 189

Multiple Choice

Failure to prepare an adjusting entry at the end of a period to record an accrued revenue would cause

• A)net income to be overstated.
• B)an understatement of assets and an understatement of revenues.
• C)an understatement of revenues and an understatement of liabilities.
• D)an understatement of revenues and an overstatement of liabilities.

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Definitions:

Perfectly Elastic

A demand situation where a small change in price leads to an infinite change in the quantity demanded.

Price-Elasticity Of Demand

A way to quantify the effect price changes have on the demand for a good.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price within a specified period.

Price Elasticity Of Demand

A measure reflecting how price adjustments influence the demand quantity of a good.